Market announcement

Title

OEG: Freezing active operations in Poland

Message

The Polish subsidiary of Olympic Entertainment Group AS (hereinafter OEG)
Casino Polonia-Wroc?aw sp. z o.o. operates the flagship casino of OEG in Warsaw
under the name of Olympic Casino Sunrise located at the address Grzybowska 63,
Warsaw. In the referred location there has been the flagship casino of OEG in
Warsaw for the last 9 years and this casino has been operated under a location
specific activity license. As referred to in the company announcement of OEG as
published on 22.09.2016 and available at
https://cns.omxgroup.com/cdsPublic/viewDisclosure.action?disclosureId=728169&mes
sageId=913970,
the referred location specific activity license of OEG’s flagship casino in
Warsaw expires on 23.09.2016. 

According to the Polish law, a public tender is held for the issue of location
specific activity licenses if there are more applicants than there are the
licenses to be issued. If the number of applicants is equal to the number of
licenses to be issued or less than that, there is no obligation lying with the
Minister of Finance of Poland to hold such public tender. With respect to
casino licenses for Warsaw, applicants were entitled to submit their
applications for the licenses with the term of 24.03.2016. By the referred
date, the Polish subsidiary of OEG, Casino Polonia-Wroc?aw sp. z o.o., did not
apply as it did not have the required address based approval by the City
Council of Warsaw as referred to below. The Polish subsidiaries of OEG Casino
Polonia-Wroc?aw sp. z o.o. and Ultramedia sp. z o.o. did submit the
applications to the Ministry of Finance of Poland for the new activity license
to the referred location on 01.09.2016. 

By today one location specific activity license in Warsaw has not been granted
yet and has to be issued by the Minister of Finance of Poland. Either of the
Polish subsidiaries of OEG have not been granted the license. The management of
OEG has grounds to believe that the applications of the Polish subsidiaries of
OEG Casino Polonia-Wroc?aw sp. z o.o. and Ultramedia sp. z o.o. were not
satisfied due to the lack of the required address based approval by the City
Council of Warsaw. The Polish subsidiaries of OEG Casino Polonia-Wroc?aw sp. z
o.o. and Ultramedia sp. z o.o. will use adequate measures to get the required
approval as soon as possible. 

Due to the lack of valid location specific activity license, OEG is forced to
freeze active operations in Poland from 24.09.2016 but remains to be interested
in continuing its operations in the Polish market and plans to participate in
the upcoming public tenders for the licenses. The main purpose of freezing the
active operations is to minimise the everyday costs and expenses. 

The consolidated revenues and income of the Polish subsidiaries of OEG in 1H
2016 amounted to EUR 9.4 million and operating profit amounted to EUR 0.5
million. In 1H 2016 the Polish operations constituted 10% of the Group’s total
revenue and income and 4% of the Group’s operating profit. 

Freezing the active operations of the Polish subsidiaries will result in an
impairment of goodwill and assets in Poland with book value in the range of EUR
9-10 million and costs associated with freezing operations amount to about EUR
1 million. 

OEG will maintain in Poland up to 15 job positions during the time when
operations are frozen, and additionally current employees are offered the
possibility to start working in 50 vacant positions in the Group’s subsidiaries
in other countries. Employment relationships with other employees will be
terminated in accordance with the law. 



Madis Jääger
CEO
Olympic Entertainment Group AS
Tel + 372 667 1250
E-mail [email protected]
http://www.olympic-casino.com